In their latest episode of the VALUE: After Hours Podcast, Taylor, Brewster, and Carlisle discuss Is Callaway Going To Be A Boom Stock? Here’s an excerpt from the episode:
Bill: Real quick. I was thinking about Callaway.
Tobias: We’re doing legit time. Callaway’s going to be boom stock when the socialist Utopia hits.
Jake: Yeah, when it’s all robots doing the real work, we all can just golf all day.
Bill: Yeah, well, I’m a rip through this one and then I’d rather talk to you guys about Buffett and repurchases. I just got a new driver and a new 3-wood. They’re crazy expensive, but they are pretty freaking good and I resisted, I mean played with my old driver for 11 years. I’m not this new golf club type guy. I was thinking to myself I was like, “Wow, Callaway might have a real upgrade cycle.”
You’ve got people that can move to the Sunbelt a little bit more, you’ve got to step up and demand. They own top golf, which I actually think is a pretty good product and a good distribution system for Callaway golf clubs. They own this Travis Matthew brand, then I was like, “I just don’t know. It’d have to be so cheap, because what’s your reinvestment runway at the end of your holding period.” I just don’t think that they really have a long runway because at the end of the day, I do think golf is in secular decline even if it gets a bump, a step up from this.
Jake: Do young people like golf relative to their parents?
Bill: I can’t say. I don’t think.
Tobias: Is golfing in secular– I don’t know that.
Bill: Yeah. It takes too long.
Jake: It is.
Jake: Yeah. Our attention spans are not golf.
Tobias: It’s not like a Tiger Woods thing.
Bill: Same with horse racing, horse racing is dead. I think it’s because you have to wait between every race. Nobody wants to do that.
Jake: Robot versus–
Bill: I acknowledge it’s different, but I think it suffers from similar trends. Anyway, I don’t know. I got to the point. It’s like I get to with Russia. It would have to be screamingly, screamingly cheap, except I wouldn’t mind making money on– [crosstalk] What?
Jake: [crosstalk] cheap like it was a net-net back in the day [crosstalk] was my portfolio.
Tobias: A few of the golf names got net-net cheap, I think.
Bill: Yeah. I don’t even know if I’d want it then.
Bill: I don’t know. I think it would take a lot.
Tobias: it’s a nice brand.
Bill: Because here’s what I was thinking.
Tobias: If you’re not paying for the brand, if you just paying for the working capital, that’s all right.
Bill: Well, when was it a net-net?
Tobias: Oh, it’s 15 years something like that.
Bill: Yes. So, what’s the opportunity cost of buying a net-net in that environment?
Tobias: Yeah, but walk around with the Callaway golf shirt on and [crosstalk]
Bill: You should have bought Google.
Jake: Well, of course.
Tobias: Yeah. Then you would be retired and playing golf.
You can find out more about the VALUE: After Hours Podcast here – VALUE: After Hours Podcast. You can also listen to the podcast on your favorite podcast platforms here:
For all the latest news and podcasts, join our free newsletter here.
Don’t forget to check out our FREE Large Cap 1000 – Stock Screener, here at The Acquirer’s Multiple: